FinTech And The Rx For Healthcare Payments

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Healthcare costs are skyrocketing — that’s no secret. Patients are shouldering an ever-growing portion of the bill, whether it be to a doctor or a facility. That means the burden falls on the practitioner or facility to manage accounts receivables efficiently. Not easy to do when, as TSYS has found, medical payments can balloon and patients may want or need to pay across multiple methods, from cash to check to card.

In an interview with PYMNTS’ Karen Webster, Carl Mazzola, president of health and public sectors at TSYS, said this situation makes healthcare ripe for a payments transformation.

Looking back just a few years ago, said Mazzola, less than 5 percent of what a doctor or other provider was charged was paid by the patient. That ratio is now up to about 40 percent, he estimated. As a result, he said, doctors now have to look at their patients not only as people they have to provide services for, but also as people who may or may not have the ability to pay their bills.

That puts doctors on an uncomfortable middle ground.

In looking at what Webster termed the doctor/patient payments “gap” — that is, out-of-pocket medical payments — Carl Mazzola said that this is where healthcare is different from any other purchase. Often healthcare can be an urgent expense, one that is tough to carry in one payment, as it can run into the thousands of dollars, depending on what is being treated and the size of the deductible that patients may be responsible for paying before their insurance coverage kicks in.

“Unlike any other major purchase that consumers are able to plan for, healthcare is not one of them,” Mazzola said.

Addressing that lack of predictability, Mazzola added, requires a change in business process — one that can have a ripple effect in the very way patients pay and doctors collect.

Prompts about payment need to be introduced throughout the healthcare continuum — at the time that an appointment is scheduled or at the time when the patient checks in for his or her appointment.

At those moments, consumers can be prompted to inquire about their out-of-pocket costs and then what payment arrangements exist to assist in making those payments. This can include making a down payment, leaving an account on file or setting up recurring payments via credit card, all of which can help the accounts receivables process.

It also requires a change in how patients view their interactions with the doctor. “As patients, we too have to learn that we have to take responsibility for what we are going to owe,” Mazzola said, adding that in the past, no one probably ever thought about calling their insurance company to ask how much it would cost to get their knee checked out.

This, said Mazzola, is where technology can be a big help. It does, of course, take time to make the phone calls to schedule the appointments, to see the healthcare providers and to travel to and from the office. And Mazzola explained, friction exists at multiple levels.

One way to reduce that friction, according to Mazzola, is software technology, suggesting that many software partners are able to provide solutions to the practitioner. Practice management systems make it possible for the cost of treatment and related insurance coverage to be visible when the call is made to schedule an appointment — and to even process a transaction for the appropriate copay.

Mazzola said that part of TSYS’ work with healthcare professionals is to try to make it easier for the patient to leave an account on file and to set up a payment plan. By encouraging the providers to speak to patients about payment, providers and patients can agree on a payment plan that’s automatically billed to a card. Mazzola added that credit cards may have a much lower interest rate than other financing plans.

Mazzola said that TSYS has found that about one-third of practices do not use technology such as a practice management system and that therefore there is much room for improvement in managing patient payments.

As consumers become used to having choices in just about anything they buy and how they pay for it, so it is with healthcare, said Mazzola. Newly minted doctors coming out of school, he said, understand that although they went into medicine to help patients, they also have to run their practice as a business — just as they would any other consumer-facing retail shop or “store front.” “They would probably buy software to run those stores,” Mazzola said. “And they should have software to run their practices more efficiently.”

As consumers become more attuned to using laptops and desktops and mobile phones for payments as they shop online, practitioners can offer new ways to pay for patients who now manage their lives digitally.

Mazzola said that in addition to mobile devices, where text messages can prompt patients for payments, physicians can establish patient portals. Those portals exist as online services where a patient can log on from home to see how much a bill is and make payments as one-offs or, according to defined payment plans, spread them out over several months.

For medical professionals deploying such options, Mazzola explained, their payments volume is significantly higher. Part of that is the conversion of cash and checks into card or electronic payments, both in the office and beyond. Allowing consumers to take that $5,000 or $1,000 expense and fit it into their monthly budget — digitally and according to their own preferences — can help foster better communication and collaboration between patient and practice.